Wholesaling Real Estate: Payneless Flipping Secrets

What's going on everybody? It's Nathan Payne. Today we're going to be talking about what the heck do you do when a seller wants way too much money for the house and you already know you can't give them the price they want and you don't want to lie to them and say, yeah, I can do that, tie them up, you know, waste some time, try to get them to renegotiate. That's not the strategy you want to do. I'm telling you right now, that's not the right thing to do. It can mess with a lot of people's lives. Don't do it. Okay, if that's your strategy, don't do it. We're gonna— I'm gonna tell you guys how I do it the painless way, how we do it and how we work with sellers when they want way too much. Okay, but they have that— they— we know they're gonna sell for cash. They're in a situation where they're, they're going to accept something lower because they want speed, convenience, and ease, and they don't want to list it with an agent. And we're like, hey, you sure? You can make more money that way. And they're like, no, I want to sell for cash. I've already decided. But you're at a point where they're, they're, they're wanting too much still. Okay, and you don't want to immediately just get hit with that gut punch and say, hey, well, I'm going to need it for 50% of Zillow, 60% of Zillow, whatever. Um, you don't want to like anchor them too low yet. I'm going to tell you exactly my process and how we're working with a lady right now who wanted $850,000 for a house, but now we're able to— we're still working. I'm going to explain it where we're able to get her to about $630,000. Okay, from $850,000 to $630,000. $830,000. So, and where she's a little bit more realistic about what's going on. Okay, so if that happens to you, which I'm sure it happens to anybody that's doing this business, when you're talking to someone that wants more than their house is worth— why? Because they just go on Zillow, they see that the Zillow estimate is, you know, $850,000, and they're like, well, my house is worth $850,000. Well, they don't know that they're in a neighborhood of newer homes and their home is older. Their house is not in the same condition as the other homes. They base everything off of Zillow or Realtor.com or Redfin. Guys, how do you handle this? All right, I'm gonna— we're gonna go over it. But before we dive in, I want to say what's up everybody. It is my birthday today, so if you want to give me a birthday shout out, go ahead, comment, say hey, happy birthday. I appreciate that. And if you don't want to give me a birthday shout out, all good. It's just another day. I'm just 33. All good. All right, well, we're going to give some time, let people come on in. Welcome. Tell me where you're watching from. It's important for me to network with you guys. And again, this call As you guys know, we love Batch Leads here and got Batch Leads in the corner. If you guys don't have it, check it out. You got a free trial, definitely go check it. And anything that I use on this call to show you, to educate you guys and teach you guys how to handle these situations when sellers want too much, it's all going to be at painlessflipping.com, including my link if you want to try Batch Leads. But anyway, go check it out. I'm excited to work with you guys. So let me take a look at the comments. If you guys are watching this on YouTube, I should be able to see your stuff. If you're on Facebook or any other platforms, I don't always see the comments, but I do see some coming through. So, oh, the CEO, happy birthday, bro. I appreciate that. Thank you so much, man. 33, feeling like I'm feeling older but feeling fresh, feeling actually I feel in the best shape of my life thanks to jiu-jitsu because, you know, I'm working out, working hard. So anyway, feel good. Carly, thank you so much. I appreciate you supporting me as well. Alright guys, so let me, let me ask you, have you ever dealt with a seller? This is just, should be a rhetorical question, but have you ever dealt with a seller that wants too much money, more than their house is worth? Okay, and what do you usually do in that situation when you know, when you know they're wanting way too much and you can't pay that and you don't want to just go ahead and tell them exactly what you can pay because you're like, I don't want to offend them. What do you guys do? Okay, so if you've had that, I want to kind of— I want you to type in there, what do you do in this situation? Seller wants too much and they want to sell for cash. They're not going to list it with a real estate agent. You've already talked to them about that. They are going to go for a cash offer. And, you know, in the back of your head, you're like, well, you know, if I tell them what I can buy, they're going to be upset or whatever. And maybe somebody is going to come along and tell them a number that they like, and then eventually they're going to try and renegotiate. That strategy doesn't work. It's not the right way to do it, especially like the situation we're dealing with the lady. She's, she's in a tough situation. She's getting divorced. And if we were just to be like, yeah, we can do $850,000 or $800,000 or something like that. And she's like, great, you know, she would get excited. She would start getting all everything ready. And then we would come in because we know we got to be a lot lower because of the condition of the home, the price point where flippers need to be in the area. We know that we'd have to go back and get it for a lot lower, and that would just ruin the relationship. And I'm not about, you know, setting expectations with people and kind of gut-punching them later. I don't think that's the right thing to do. So how do I deal with it? If again, any of you want to comment what you do, that'd be cool. Let's learn from each other. But, um, let's go into it right now. All right. So here's the story. I get a lead from a friend. My friend's like, hey, I know this lady needs to sell for cash. She needs to— she wants to sell fast. And I asked him, well, you know, Has she thought about listing it? Because, you know, we also can refer to an agent if she wants to do that. She's going to get the most if she goes that route. Obviously, you're going to make more money if you just list it. It takes time. You get, you know, cash is usually going to be the lowest offer. And he's like, yeah, she doesn't want to go with an agent. She wants to sell this thing ASAP. Okay. So I'm like, all right, all right, that's cool. What does she want? And he's like, she wants $850,000. I'm like, okay, wow, that's a higher price point. But he's like, no, but it's a really nice neighborhood, big home. I'm like, okay, so guess what? I go on Zillow and guess what I— when I type in the address, guess what I see? And also on Batch Leads, you know, you type in there, you see what the estimated value is. It's around $850,000. Okay, she wants just what she looked it up, and that's in her mind. Her mind is it's worth $850,000. She can't tell her any different. So when we get her, when we get her, that's what she wants. And it's not worth $850,000. And let me show you guys exactly why, because the ARV is around $850,000. Okay, and the cool thing about Batch Leads is you can go in there, you can check out the comps. I can't dive too deep into it because, you know, YouTube, if with all the good information that Batch Leads shows, it basically— YouTube's like, hey, you can't show all that info. But I'm taking you guys through like the process of what how I determine this is a deal or not. Okay, so look, this is the spreadsheet I use, uh, for when I wholesale deals. Okay, so, and I give this away obviously at painlessflipping.com, um, if you're part of the academy. But anyway, so the house is worth $850,000. Okay, that's what the ARV is. All right, that's what we can sell the house for. That's what Zillow says, but I looked it up, it's pretty much worth $850,000 fixed up. Okay, so I'm a flipper, I'm a flipper. I'm actually in this scenario, I'm going to wholesale. So I got to wholesale to a flipper. So let's say I give it— she's like, look, I'll give it to you for $800,000. I'm giving you a $50,000 discount. This is how flippers, they run their numbers. Okay, this is a spreadsheet I got from a hard money lender that I work with, and this is how he determines if he likes to do deals or not. Okay, if he's going to fund something. So hard money lender is going to give someone money. They're going to give the money to flip the house. At 12% interest, 2 points to borrow the money, and he's going to require $15K, 15% down, which is $120K that the, the flipper is going to have to bring to the deal to get in. And this flip, let's just say it takes 4 months. It's not that big of a rehab. The house isn't terribly distressed, but if you want to get $850K, you're going to have to put some work into it. You're going to have to pay commissions when you sell it and you're going to have to pay closing costs. So if I went in here and let's just say that the rehab cost is $20K, it's not a very— let's— it's just a minimal rehab. You're gonna have to redo some things, you know, redo. It's not that big. It's a big of rehab. It's a small— it's a— it's not a small house, but it's— the house is fine. So if I wanted to make $10K, a $10K wholesale fee, and these are the numbers that the flipper would have to pay. These are all his costs from the hard money, from holding it, from paying an agent, paying closing costs. If, if I got it for $800,000 from the seller and I wholesale it to him for $10K and his price was $810,000, he would lose $63,000. Okay. He would lose money. He'd be at a negative 7% return. That's why $800,000 is not that— it's not a discount for a flipper. It's, it's actually loses you money if you buy that. So the seller's like, hey, I want $800,000. I know that doesn't work because I know that if she sold it on the MLS just after 3%, well, 6%, she'd pay listing and she'd pay a buyer's agent. She's going to walk away with pretty much $800,000. That's if she sells at $850,000, if it's in the condition that's required to sell for $850,000. If she sold it in as-is condition, she'd probably sell for like $775,000. Uh, um, and then she'd get less than that. Okay, so anyway, seller is wanting too much. That's all I'm trying to say. So where would I have to be for this to make sense for my flipper? Well, my flippers want to be in the green. If they can get in the green, they're 100% gonna buy the deal. They're like, yeah, freaking, uh, if I can get in the green, I'll make good money. So at $650, okay, at $650, he's at an 11% return. Now my flipper. And that's, guys, right here, most of my guys will buy in the yellow, okay? Now, in green, it's a no-brainer. They're going to be like, yes, every time. But yellow is what they're going to— they're still going to do it. When they get into like the 9%, then they're like, maybe not. But it really depends on who you're working with. Oh. I have the talk-to-text on, so that's why it's jacking up, messed it up. So guys, if I got this house at $630,000 and I gave it to my buyer, um, I wanted to make $10K and I gave to him at $640,000, they'd make $116,000. They're going to do this deal. So I know at $630,000 it's a deal, okay? But I also know that I could probably sell it to someone where they'll make a 10% return instead of 14%. So that means I can increase my wholesale fee if I wanted to, um, to $40K. Okay, I hope this is all making sense. This— I'm just running numbers. This is how I determine if this is a deal. Now, she said she wants $800K in the very beginning of the— of our conversation with the lady. She's like, I want $800,000. And I'm like, well, you wouldn't— in my mind, I'm like, you wouldn't really get that if, um, even if you listed it or Okay, so how do I handle this situation? That's what I wanted— that's what I said I would tell you at the very beginning of this situation, this, this call, is I go here to my offer options spreadsheet and I walk the seller through the options. And now you can do it with a screen share, you can show this one on your iPad, you— or you can just talk to them about it. But I say, hey, look, before I give you my cash offer, because usually when we buy properties it's not going to be your best offer because we have to, we have to make a profit, we have to go in there and, you know, rehab it, we got to make money. I don't know exactly where I would be. That's what I say. But have you thought about fixing this up yourself and flipping it? That's why I say the next thing. Have you thought about doing, you know, upgrading it yourself? And then they usually say, no, I haven't, because I don't have, you know, I don't have $20,000. I don't have 4 months. I want to be out of here ASAP. So I say, okay, so flipping yourself is out of the question. Is that right? Okay. They're like, yes, it's out of the question. Okay, got it. What we can do is that we can put this on the market and we can partner to find someone that will flip it. We can do a novation. And they don't know what that is, but you can just basically say we can do a full-service program where we put it on the market and, you know, we look for a partner to flip it with us, and that way we can get you the most money possible. Okay, and then there you— she's like, well, you got to put it on the market, put in the MLS. No, I don't have time for that. Like, okay, I totally get it, but if we did that, you're going to be able to make more money. I'm just giving you your options here. She's like, no, I want to be done ASAP. And then I don't always pitch like seller finance, owner carryback, because that just depends on their situation. Usually if they don't have time, um, well, if they have a ton of equity and they want it all up front, usually I don't, I don't pitch seller finance. And a lot of people will be like, oh, you can do it with anything. Of course you can, but I don't want to confuse the seller. And in this situation, um, that doesn't really work. So unless she's like really, really wants her price and then she's just going to have to take it over time. But anyway, so I've already— when I've talked to sellers, I say, okay, hey, look, if you want the most, you're going to have to renovate it, but you don't want to do that. Okay, that's fine. I totally get it. And if you want— if you want the next best option of not fixing up yourself, but if you want the next best option of making the most, we can look for a partner and flip this and we just have to put on the market and find a partner. And she's like, no. So I say, okay, look, look, This is— and this is how I handled the conversation. Here we go, guys. So I say, hey, look, you know, usually this is not my final offer, but usually for us to buy a property— and I'll usually show the spreadsheet of like where I need to be if I'm with them in person. And now if I don't feel like showing the spreadsheet, I don't. But it just kind of depends like how I'm feeling. I'll just say, hey, usually we buy properties in this area, and don't be offended, get ready. I don't Sit down, Mrs. Seller, Mr. Seller. We usually buy properties in similar condition to yours for around $600,000 to $650,000 in that range. Now, that's not my final offer. I'm just saying that's where it would be. Is that some— is that some place or is that somewhere you could see yourself selling this for if we could buy it and close on it in the next couple of days or next couple of weeks? And you just see what they say. They're like, if she's like, absolutely not, not even close, wouldn't even take. Wouldn't even do that. So that's kind of like where this, the situation was. Like, she couldn't see herself at $800,000, anything below $850,000, $800,000. Um, she just didn't make sense to her, right? And I said, hey, these are your other options. Um, and then, you know, she doesn't want to do that. So this is what I say, this is what I say, this is the painless way, and this is how I handle things. I say, look, look, if I buy this thing, if you want 100% yes that I can buy this, I'm gonna need to be in that range. And and I can kind of dive a little bit deeper, but it's going to be somewhere around there. Sounds like you're not really open to that, and it sounds like you're going to sell for cash. I do have a large network of cash buyers that I work with, and what I can do is I can kind of run this by some of the people I work with just to see where they would be. And, um, you know, maybe I can partner with one of them, maybe I can, uh, get, get in on the deal with them, but, uh, they might be able to pay a little bit more than I can. And this is usually what they say is, yeah, fine, Show whoever you want. I got to make more money. And then what I do is I don't blast this out to the whole United States. I don't blast it out to the whole state of Utah. I just reach out to my cash buyers I have a relationship with. I don't have this deal under contract. I have not told the seller, yes, I can do $800,000, $750,000, or anything. I've just said, hey, look, let me see if I can— what I can get. I reach out to my cash buyers and I say, hey guys, this is the situation. I trust them, they trust me. We've done deals together. And I say, where would you be on this deal? And I usually set up a way to go see it, like a walkthrough. So that's what we did on this property. We sent people through and they told us where they needed to be. And she said, we were getting offers anywhere from $630,000, $650,000. Most of them are $630,000, $650,000 where I was needing to be. We have one at $700,000, $740,000, and $750,000. There's someone, one of our buyers is, $100,000, $110,000 were over majority of the offers and where, where I would be. So now, now it's been a couple days. It might have been— actually, it's probably been a week or so. The seller is understanding from our telling her, hey, a lot of people are in this lower range. Her expectations are lower. The trust is there because she doesn't— we haven't said, yeah, we can do $800,000, we can do $850,000, and then try to sign a contract and then try to lowball her later. We're just telling her what we're seeing, what are the cash offers, like what people are wanting to, you know, flip a house for in that area. So we are in the situation where she's gone all the way from $850,000. Now she is understanding that most offers, because they are around $730,000 to— sorry, $630,000 to $650,000. Now we do have that offer at $740,000. We are vetting just to see like if that's the flipper we want to go with, we want to wholesale it to. And yeah, and now, you know, she's open to that range of $630,000, $640,000. So that's how I deal with it, guys, because again, I don't like situations where they want a certain price and I know it's way too high. And I just tell— like when I was a noob, I would just lock stuff up and just like hope that I could renegotiate it. Terrible idea. Yeah, of course it works occasionally, but that's just not the way you want to run business because you don't want to be setting expectations for people, you know, especially in situations where there's a divorce and, you know, they want to move on and you tell them something and they're like, they get all their hopes up. So anyway, that's the process that I use. And it happens all the time, guys. It happens that sellers want too much. And if you just say, hey, look, these are your options, and they don't pick the renovate themselves or do a novation where you can get them more, or they don't want to just list it with a friend or themselves, you say, hey, this is what I can do for you. You get kind of anchor them low, and if they accept that, then you, you got a deal. And if not, then you just run it by some of your cash buyers, see where they would be, and then it's easy negotiation from there. So I thought that would help you guys all out with the cat— how to deal with cash offers with sellers and how to deal with cash buyers. We just ask our cash buyers where they would be. And again, we don't have this under contract. Um, could someone go around us? Anything could happen. We could sign a contract and someone could still go around us. So we send this to people that we trust and we work with, and I'm I'm not worried about it and we've developed a good relationship with the seller. So I hope that helps you guys out to kind of understand the flow that I work with and I call it painless because like I didn't, you know, I didn't tell her, I didn't like hold anything back. I'm not hiding anything. I'm literally just giving her the options that she has. She gets to pick which one she wants. I'm happy for her with— for whatever she decides. And if she wins, I win, we all win. And you know, it's potential, it's a potential big deal we could make. You know, obviously we want to help her out and get her as much as we can, but you know, we have a business to run as well. So we'll see what happens, and I hope you guys all got some good, some good insight out of that. We got Chivito saying, where are you located? I'm located in Salt Lake City, Utah. How about you, brother? How about you, Chavito? Where are you from? And I'm going to open it up to some questions, guys. I do this so I can help you guys succeed and do more deals. Really, like, this game, this game, guys, is just the numbers. Like knowing how to run simple math and you don't even need a spreadsheet like this. But I like to use this so I can make sense of it to the seller. I like to make sense of it to me. But, you know, I'm kind of thinking we'll probably get around— she'll probably accept around $650,000. ARV of this property is probably $850,000. And we'll probably honestly be able to wholesale it for like $690,000, right? And that'll be like an 8% return. We'll make $40,000. And the seller, you know, hopefully that's Shit, I think their goal is to pay off their debt and then walk away with $10K each or something like that. So, you know, hopefully we can get them to that point. But anyway, that's how the numbers break down, everybody, and I hope that makes sense. You know, we do— like I said, this is brought to you by BatchLead, so we do use that to run the comps and make sure we're in the right spot. But yeah. What's the hardest wholesale deal you've ever had to deal with? Man, there's too many of those, brother. Too many. I would say like, hey, CEO, if you want to kind of learn about like some of the deals I've really gone through and they've been crazy, go to my YouTube channel. I'll actually show you guys like where to watch it because this— I can— I could tell you the story right now, but I've already told the story. Let me show you really quick. So I have something called Nathan Payne's Wholesaling Storytime. So let me show you. This is probably one of the hardest deals that I've had to do. So if you just go down here into the playlist, Nathan Payne's Wholesaling Storytime, it was this one right here, Wholesaling Real Estate Storytime: Moved a Hoarder. This one was the craziest. The craziest situation, hardest deal because I had to move a hoarder. I had to like talk her, she was crying all the time. I had like, I had to go back and forth. I had to drive her moving truck like 2 hours south to like southern Utah, moved her stuff like she wanted to cancel a lot, like wasn't sure she wanted to move. I had to, you know, we had to kind of be her therapist. Anyway, watch that video if you guys are interested on like what's the hardest wholesale deal. That was like when I first started but That's to answer your question. It's when we had to move a hoarder. I'll throw that link in there if you guys want to— if you want to watch that because it's actually kind of a funny story. But yeah, that would be my answer to you, my friend. Alright, well everybody, again, I hope that was helpful. We run into every day, we run into sellers that want too much and what do you do? You just open and honest and transparent. Just say, hey, look, like, you're going to make more money if you do this. Are you thinking about doing these things? Can you do these things? Yes or no? Okay, you can't. Okay, well, you know, I'm going to be around here. Okay, that doesn't work for you. Well, I do know a couple other people. And by the way, I don't really run this by buyers unless, like, I know they're going to sell for cash and it's legit. If they're just like, oh yeah, you can see what they'll pay, but if I don't get what I want, I won't move. Like, I determine like this. This situation, like she's going to sell, she needs to sell. And that's— so again, don't just do this, don't waste your time just checking on like what people will pay for anybody. You have to— there has to be motivation involved. And what are the 4 pillars of motivation? It's like, you know, the timeline, they want it fast, the condition of the property stinks, their motivation is one, like the reason, and shoot, I can't remember the other one. What was it? Timeline, I'll remember it later. I'm sure you guys can go find it, but yeah, hope that helps everybody. I'm about to sign off. Does anyone else have any other questions before we dip? See, oh, did that answer your question? I sent that link for that video. I don't know if you've seen it, but moving that hoarder, don't do it, everybody. If a hoarder— don't offer to personally move. Oh yeah, and this is the deal we're talking about right now in Salt Lake with this lady. Like, she needs help with moving too. But you think I'm going to get the U-Haul like I did in that old video that my— when I did back in the day, I used to U-Haul people around and their stuff. No, I'm not. If she— we're going to help her move, we're going to get the buyer to pay for it. We're going to get, you know, that all coordinated by a moving company. I'm not picking up any boxes. Forget that. Yeah, yeah, definitely going to watch it. Yeah, I'd recommend watching those storytime ones because I actually dive into like how I did those deals and my and the stories behind all of them. Those are good to watch. They're more entertaining. This is more like we're teaching you how specifically to do the strategies. But check those videos out and give me your feedback. I'd love to hear about it. Oh dude, I appreciate it. I'm about to actually about to sign off right now and go to dinner with my wife. So, uh, wish me, wish me luck. Wish me happy birthday. I appreciate you, CEO. And, uh, yeah, love it. All right everybody, have a great one. And like I said, if you liked any of the resources on here, go to the Paintless Flipping Academy where you got our batch leads link that gets you a free trial and give a bunch of free resources in there as a gift because it's a 15-day free trial. You can check it out, get your money back if you don't like it, but you'll love it. I promise. Peace out, everybody.